A foreign group acquires a distribution network in France and, within months, receives a dawn raid notice from the French competition authority. The in-house team had assumed that the transaction fell below mandatory thresholds. It did not. The cost of that assumption – in legal fees, operational disruption, and reputational exposure – vastly exceeded the cost of prior legal advice.
Competition law in France is enforced by a specialised independent authority with broad investigative powers and the capacity to impose substantial fines. French commercial legislation (Code de commerce) governs the core prohibitions: anticompetitive agreements, abuse of market dominance, and merger control. International businesses operating in France must account for both national enforcement and the parallel application of EU competition rules.
This page explains the key legal instruments, procedural steps, common pitfalls for international clients, and the cross-border dimension connecting French, Portuguese, and EU competition regimes.
The French competition enforcement environment
France maintains one of the most active competition enforcement regimes in Europe. The competition authority – the Autorité de la concurrence (French Competition Authority) – operates independently of the government and handles merger notifications, cartel investigations, abuse of dominance cases, and sector inquiries. For conduct with an EU dimension, the European Commission and the French authority share jurisdiction under the EU competition rules decentralisation system.
French commercial legislation prohibits two principal categories of conduct. First, anticompetitive agreements between undertakings – whether horizontal (between competitors) or vertical (between suppliers and distributors) – that restrict, prevent, or distort competition on the French market. This prohibition covers price-fixing, market allocation, bid rigging, and a range of less obvious vertical restraints. Second, abusive exploitation of a dominant position, which may include predatory pricing, exclusive dealing, margin squeezing, and tying arrangements.
The practical starting point for any business active in France is a realistic assessment of its market position. A company holds market dominance when it can act to a significant degree independently of competitors and customers. Courts in France and at the EU level have consistently applied this standard to companies holding large shares of narrowly defined product or geographic markets. Dominance is not itself unlawful. The abuse of that position is.
Practitioners in France note that the authority has significantly increased its enforcement activity in digital markets, retail distribution, and healthcare. Complaints from competitors and customers are a primary source of investigations, which means that businesses which underestimate their market position may be exposed to regulatory scrutiny without prior warning.
Violations can attract fines of up to a percentage of worldwide turnover, together with periodic penalty payments for non-compliance with remedies. Directors and officers of a société par actions simplifiée (SAS) or a société à responsabilité limitée (SARL) may face individual criminal liability under French criminal law for personal participation in cartel conduct. The risk is not theoretical: the authority has referred cases to the public prosecutor, and criminal convictions for cartel participation have been recorded in France.
Key legal instruments and procedures
French competition law operates through four principal procedural channels: merger control, antitrust investigation (covering both cartel conduct and abuse of dominance), leniency, and private enforcement before the civil courts.
Merger control. Concentrations meeting the French thresholds must be notified to the authority before completion. The thresholds are measured by combined turnover of the parties and the turnover generated in France by each of at least two parties. Where the transaction has an EU dimension, notification goes to the European Commission instead. A merger completed without required notification – known as gun-jumping – triggers fines and, in principle, the risk of nullity. Timelines run in phases: a Phase I review is completed within 25 working days of a complete notification. Where the authority identifies serious competition concerns, it opens a Phase II investigation, which extends the review period significantly. Conditions – such as behavioural commitments or structural remedies – may be imposed as a condition of clearance.
Cartel investigation. The authority may initiate an investigation on its own initiative, following a complaint, or in response to a leniency application. Dawn raids – conducted under ordonnance (judicial warrant) issued by a judge – allow investigators to enter business premises, seize documents, and copy electronic data. The presence of a huissier de justice (enforcement officer in French law) is required to certify the regularity of the search. Businesses are entitled to legal counsel during a dawn raid, but delay in calling counsel can result in documents being seized before any privilege claim is assessed. The formal investigation procedure involves a statement of objections, a hearing before the case committee, and a final decision by the college of the authority. The full process from opening to decision typically spans one to three years for complex cases.
Leniency programme. French competition legislation provides a leniency programme under which a cartel participant that voluntarily discloses the existence and operation of the cartel can obtain full or partial immunity from fines. Full immunity is available only for the first applicant to provide sufficient evidence. Subsequent applicants may receive a reduction in fine proportional to the added value of their disclosure. A business that suspects it may be party to cartel conduct – including through industry association activities or joint purchasing arrangements – should assess the leniency option before the authority receives information from another source. The decision to apply for leniency carries significant strategic consequences and requires specialist legal input.
Private enforcement. Since the transposition of the EU Damages Directive, claimants who have suffered harm from anticompetitive conduct can bring damages claims before French civil courts. The Cour de cassation (Court of Cassation of France) has confirmed the standing of indirect purchasers to claim. Follow-on damages actions – brought after an authority decision – benefit from a rebuttable presumption that the infringement caused harm. Stand-alone claims, brought without a prior authority decision, require the claimant to establish both the infringement and the causal link independently. Limitation periods for damages claims run from the date the claimant knew or should have known of the infringement, the identity of the infringer, and the harm caused.
For companies involved in commercial disputes with a competition law dimension, our practice in commercial litigation in France addresses the procedural and evidentiary challenges of civil court proceedings in parallel with regulatory matters.
To discuss how merger notification thresholds, leniency strategy, or a dawn raid response applies to your situation in France, contact us at info@ferrazwhitmore.com.
Practical pitfalls for international clients
International businesses entering or expanding in France encounter a set of competition law risks that are not immediately apparent from the statute.
Underestimating vertical restraints. Many distribution arrangements that are standard in common law jurisdictions are restricted or prohibited under French commercial legislation. Resale price maintenance – setting a minimum resale price for a product – is presumed anticompetitive and attracts significant fines even where market shares appear modest. Exclusive territorial protection and selective distribution systems are subject to specific conditions. Businesses that import their standard distribution agreements from the UK or the United States without adaptation routinely find themselves in breach.
Information exchanges in trade associations. Participation in industry association meetings where commercially sensitive information is exchanged – pricing intentions, production volumes, customer strategies – can constitute cartel conduct even without any formal agreement. The authority has taken enforcement action against trade association members based on meeting minutes and email exchanges. A non-obvious risk for in-house counsel is that the exchange of information between parent and subsidiary companies in the same group may. In limited circumstances, be treated as a horizontal exchange where the two entities compete on a particular market.
Failing to notify below perceived thresholds. Businesses sometimes assume that because a transaction does not meet the EU thresholds, no notification is required. The French national thresholds apply independently, and in certain sectors – retail, media – the authority has jurisdiction to review transactions that fall below the standard national turnover thresholds. A failure to notify where required allows the authority to order the unwinding of the transaction. In practice, this creates significant commercial and reputational exposure for the acquirer.
Dawn raid response readiness. Many international groups lack a France-specific dawn raid protocol. In the absence of trained staff and pre-prepared procedures, documents are produced without privilege review, employees make uncoordinated statements, and electronic devices are surrendered without objection. The authority's investigators are experienced and efficient. The first hours of a dawn raid are the period in which the most material evidence is collected. Businesses that invest in a pre-raid protocol – document retention policies, legal privilege training for key staff, and a direct line to external counsel – materially reduce their exposure.
Limitation periods in private claims. A company that has suffered harm from a cartel or abuse of dominance has a finite period in which to bring a damages claim. Many businesses overlook private enforcement entirely, either because they are unaware of the right to claim or because they assume the authority's investigation will automatically result in compensation. It does not. A separate civil claim must be filed, and the limitation clock runs independently of the regulatory investigation.
Cross-border and EU strategic considerations
French competition law does not operate in isolation. Businesses active in France and in other EU member states face the concurrent application of EU competition rules, administered by the European Commission and coordinated through the European Competition Network.
Where conduct affects trade between EU member states – as is typically the case for pan-European distribution agreements or multinational mergers – both French national rules and EU rules apply. In principle, the national authority cannot apply national competition law to reach a conclusion different from that which EU rules would produce for the same conduct. This alignment reduces the risk of conflicting obligations but does not eliminate it entirely. The French authority retains jurisdiction over purely domestic conduct and over aspects of conduct that have a primarily French dimension.
For groups operating between France and Portugal, the interaction of the two national regimes merits specific attention. A pan-Iberian or Franco-Portuguese distribution agreement, a cross-border merger in the food or retail sector, or a joint venture between French and Portuguese entities will ordinarily require assessment under both French and Portuguese competition legislation. The Portuguese competition authority and the French authority are both members of the European Competition Network and coordinate enforcement activity. A leniency application in France does not automatically produce immunity in Portugal, and vice versa. Separate applications may be required, and the timing of each is strategically significant. Our practice in competition law in Portugal covers the parallel Portuguese regime in detail.
At the EU level, the European Commission has primary jurisdiction over mergers meeting EU turnover thresholds and over conduct that substantially affects competition across the single market. The Commission and the French authority may jointly investigate related conduct. A business under Commission investigation for a cartel will typically also face national proceedings in each member state where the cartel operated. Coordinating the response across multiple jurisdictions – managing document production, witness statements, and leniency positions simultaneously – requires experienced cross-border counsel.
For businesses operating in France and considering the full spectrum of commercial and regulatory risk. Our guide to company formation in France addresses the structural and governance considerations that influence competition law exposure at the entity level.
For a tailored strategy on competition law compliance, merger notification, or investigation response in France, reach out to info@ferrazwhitmore.com.
Self-assessment: when to seek specialist competition law advice in France
Competition law obligations in France are triggered by specific conditions. The following checklist helps identify when specialist input is required.
Merger and acquisition activity. Seek advice before signing if: (i) the combined French turnover of the parties exceeds the national thresholds. (ii) the transaction involves a target active in retail. Media. Alternatively, a regulated sector where specific notification rules apply. (iii) the transaction is a joint venture between competitors with overlapping product or geographic markets in France.
Distribution arrangements. Review existing agreements if: (i) the agreement fixes or recommends resale prices. (ii) exclusive territories are granted to distributors in France. (iii) online sales restrictions are imposed. (iv) the market share of either party exceeds the safe harbour thresholds under the applicable block exemption.
Dominant position. Seek advice if: (i) the business holds a large share of a defined product market in France or a regional market. (ii) pricing, rebate. Alternatively. Exclusivity terms are set by reference to competitive conditions rather than cost. (iii) a competitor or customer has filed or threatened a complaint with the authority.
Cartel exposure. Seek urgent advice. This includes leniency assessment. If: (i) the business participates in trade association meetings where pricing or market data is discussed. (ii) an employee has received or sent communications that could be characterised as coordination with a competitor. (iii) the business is aware that a competitor has approached the authority.
Dawn raid response. Establish a protocol in advance if: (i) the business operates in a sector subject to frequent authority scrutiny. (ii) the business has previously been subject to an investigation. (iii) the business is active in multiple EU member states and a coordinated investigation is a foreseeable risk.
This approach in France is applicable to businesses incorporated as a SAS, a SARL. Alternatively. Any other legal form under French company law, as well as to branches of foreign entities active on the French market.
Frequently asked questions
- How long does a merger review take in France, and what happens if the authority raises concerns?
- A Phase I review is completed within 25 working days of a complete notification. If the authority identifies serious competition concerns, it opens a Phase II investigation, which extends the process significantly – typically by several months. During Phase II, the authority may impose conditions such as divestments or behavioural commitments as a condition of approval. Transactions that proceed to closing before clearance is granted risk fines and, in principle, an order to unwind the deal.
- Is it possible to settle a competition investigation in France without a full contested procedure?
- Yes. French competition legislation provides a settlement procedure under which a company under investigation can accept liability and negotiate a reduction in the proposed fine in exchange for not contesting the objections. Settlement reduces the duration of the procedure and the level of the fine. It does not, however, eliminate the risk of follow-on damages claims by third parties who suffered harm from the conduct. The decision to settle requires careful assessment of the authority's evidence and the potential civil exposure.
- A common misconception – does complying with EU competition rules mean a business is compliant with French competition law?
- Not always. While French competition legislation is closely aligned with EU competition rules, the French authority retains jurisdiction over conduct that affects only the French market. Certain vertical restraints and pricing practices that may benefit from EU block exemptions can still attract scrutiny under French rules if they produce effects on French competition that are not addressed by the EU exemption. Engaging a lawyer in France with cross-border experience is essential for businesses that rely on EU-level compliance assessments as a substitute for specific French law advice.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our competition law practice advises international groups on merger notifications, cartel investigations, dawn raid response, leniency strategy, and private damages claims in France and across Europe. We combine Portuguese civil law expertise with English common law tradition to deliver cross-border competition law solutions for clients active in multiple legal systems. The firm's competition practice covers both national enforcement proceedings before the French Competition Authority and EU-level proceedings before the European Commission, supported by a network of local counsel across 15 practice areas. Our attorneys have advised on merger control and antitrust matters in both civil law and common law jurisdictions, and the firm's Lisbon base provides direct access to EU regulatory systems and Atlantic market networks. As an international law firm in France and across the EU, Ferraz & Whitmore helps clients build effective compliance programmes and respond to enforcement action. To discuss your competition law situation in France, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.